US stocks ended their worst month for six years on a positive note on Tuesday, repairing by more than half the damage from the previous session’s historic slump.

Equities rebounded from their worst session since Black Monday on hopes that Washington would revive a plan to bail out the banking sector. The rally came even though money markets remained under unprecedented strain – as they have been for the past two weeks – while the latest housing data showed there was little economic respite in sight.